Improve - Green Brewer

To ensure a viable environment for future generations, businesses and communities are embracing more sustainable ways of producing and consuming. Heineken is committed to playing its part and is working hard to increase the energy and water efficiency of its breweries, warehouses and offices.3

Several of our 140 breweries already meet our 2020 targets and we are sharing these best practices with those breweries that are not yet there. Ultimately, we want our operations to have the smallest possible emissions footprint. To this end, we are exploring ways to build breweries that are C02 neutral and breweries that use zero fossil fuels. We are also investigating how to replace fossil fuels with energy from renewable sources like sun, wind, biomass and biogas. Currently, measures are being taken at our Göss brewery in Austria and our El Gouna brewery in Egypt to establish and test a model for a ‘C02 neutral’ brewery.

Water is crucial to both our brewing process and to the communities in which we operate. Our commitment is to decrease the amount of water we use in the brewing process, ensure the water we return to the eco-system is clean and that we do not prevent local users from gaining access to clean, fresh water for their own use. That’s why we have committed to doing everything we can in the coming decade to apply the principle of water neutrality in those regions designated as water scarce.

Finally, we are taking a critical look at our warehouses and offices. In 2011 we plan to map their energy consumption, so that we can start working towards specific reductions and reducing further the negative impact on the environment.

3 Scope of the numbers in this report: breweries, soft drink plants, cider plants and water plants are taken into account.

“In the last eight years, our ‘Aware of Energy’ programme has reduced energy consumption across our business by 17 per cent.”

Marc Gross Chief Supply Chain Officer

Energy and water efficient production

In 2010, we surveyed our breweries for best practices, and shared these through our knowledge management system for use in future designs and renovations. A dedicated team continued the task of designing an energy and water efficient brewery and a zero fossil fuel brewery. We also appointed energy and water efficiency co-ordinators at all Operating Companies.

Actual 2008

Reduction 2020

Greenhouse gas emissions [kg CO2-eq/hl]

10.4

40%

Water [hl/hl]

5.1

25%

Responsible and profitable waste management

Poland

Responsible and profitable waste management

In order to improve its performance in relation to waste management, Grupa Zywiec in Poland implemented a sophisticated waste management programme across its four breweries.

As a result of better processes, training, on site equipment and close co-operation with external partners, the breweries now recover and process 99 per cent of their waste.

In 2004, Grupa Zywiec developed a different approach to waste management. “Today, waste is segregated in special containers, waste streams are clearly monitored, and waste collection and transport has been outsourced to qualified companies. Waste is now recovered or neutralised depending on what is technically and financially feasible,” says Roman Korzeniowski, director of the Elblag brewery.

The new approach also entails clear ISO-certified procedures, improvements made using the Total Productive Management System (TPM) approach and training. Employees, for example, have been taught where and how to collect waste and sub-contractors have been trained to collect hazardous waste such as chemicals and lubricants.

The new approach has dramatically reduced the environmental impact and the cost of waste. At the Elblag brewery, for example, the amount of non-segregated waste was reduced from 793 tons in 2006 to 55 tons in 2010. “Waste management has even become profitable for us. In 2010, Grupa Zywiec sold its waste at a profit of EUR3 million. This is a great example of how going green can also be good business”, says Roman.

Thermal and electrical energy in production4

The combined amount of thermal and electrical energy (calculated as primary energy) needed to produce one hectolitre of beer, soft drinks, cider or water decreased from 170 Mega Joules in 2009 to 166 Mega Joules in 2010. Specific thermal energy consumption improved by 1.6 per cent from 89.0 to 87.6 MJ/hl and electricity consumption by 3.6 per cent from 9.0 to 8.7 kWh/hl.

Some of the main contributors to the energy saving trend are improved performances from our breweries in Central and Eastern Europe. Thanks to a large increase in production volume, coupled with the implementation of an energy plan, the Rechitsa (Belarus) brewery significantly improved its thermal energy consumption and electrical consumption. Thermal energy savings were also achieved at two of our Romanian production units in Ciuc and Craiova by deploying TPM energy loss reduction teams. Finally, our production unit in Nizhny Novgorod (Russia) saved a significant amount of thermal energy via the installation of a more energy-efficient boiler house.

The electricity saving efforts of the breweries above were complemented by our production unit in Lahti (Finland) which also lowered its specific electricity consumption thanks largely to increased production volume. Our brewery in St. Petersburg (Russia) saved a large amount of electricity by decommissioning an energy-inefficient gas turbine.

As a result, we exceeded the promised energy consumption of 15 per cent compared with 2002 and achieved 17 per cent savings of total primary energy.

4 Total energy consumption equals the sum of the thermal energy consumption (MJ/hl) and the electricity consumption (kWh/hl). The total energy consumption is calculated as: thermal energy consumption (MJ/hl) plus nine times the electricity consumption (kWh/hl) and is expressed in MJ/hl. The total energy consumption can be considered as the equivalent use of primary fuels to produce the different kinds of energy.

Greenhouse gases in production

The performance in greenhouse gas emissions (the amount of direct and indirect CO2 emissions and refrigerant losses expressed as CO2 equivalents per hectolitre of beer, soft drinks, cider or water produced) improved from 9.8 kg CO2-eq/hl in 2009 to 9.3 kg CO2-eq/hl in 2010 primarily as a result of the energy saving activities of our breweries.

In 2010, as a result of the newly acquired production units and volume increase, our total absolute greenhouse gas emissions increased from 1,327 ktonnes in 2009 to 1,612 ktonnes CO2-eq in 2010 for our beverage plants, of which 409 ktonnes is attributable to new acquisitions. The performance of our 2008 base of companies (i.e. excluding recent acquisitions) improved.

Heineken uses a variety of instruments to reduce and manage the CO2 emission risks. The preferred option is to make use of less carbon-intensive technologies (58 production units) or to switch to less carbon intensive fuels (26 production units). Twenty production units in Europe participate in the emission trading scheme. We are also active in carbon sequestration (two production units), Clean Development Mechanism (CDM) and Joint Implementation (one production unit each).5

Natural gas and LPG are the most dominant fuel in relation to our direct energy consumption, accounting for 61 per cent of heat generation. Fuel oil and diesel account for 38 per cent and nearly 1 per cent of total energy is derived from renewable fuels (biomass and biogas). We do not use coal. Our approach to renewable energy sources is explained later in this chapter.

5 Joint Implementation (JI) and Clean Development Mechanism (CDM) are the two project-based mechanisms, additional to the Emission Trading Scheme as key tools for reducing emissions worldwide. JI enables industrialized countries to carry out joint implementation projects with other developed countries, while the CDM involves investment in sustainable development projects that reduce emissions in developing countries.

Types of fuels used Calculation of MJ per type of fuel

Environmental compliance

In 2010, we recorded 67 accidents with the potential to cause harm to human life, property or the ecosystem and/or which can cause nuisance to a third party. About half of the accidents are related to the quality of effluent, which exceeded the legal limits. Five production units had to pay fines because of one or more environmental breaches, amounting to a total of EUR190,000 (in 2009 the comparable figure was: EUR357,000).

The number of environmental and safety complaints related to environmental or industrial safety accidents with off-site effects has decreased from 75 in 2009 to 30 in 2010. This is mainly the result of the implementation of preventative measures based on lessons learned and due to the temporary shutdown of the biomass plant in Manchester (the UK). Half of the complaints in 2010 relate to nuisance by noise.

Environmental and safety complaints number

More sustainable buildings

Our energy and water successes have prompted us to review the environmental performance of offices and warehouses. An April 2010 seminar on BREEAM (Building Research Establishment Environmental Assessment Method) and LEED (Leadership in Energy & Environmental Design) standards taught us more about energy-efficient buildings. We have also made a commitment that in 2011, we will start to measure and set targets in relation to the environmental performance of our buildings. To help us, we have joined the International Sustainability Alliance (ISA), a group of companies dedicated to achieving a more sustainable environment through better measurements and understanding of the sustainable performance of buildings.

LED there be light

Netherlands

LED there be light

Vrumona is Heineken’s manufacturer, marketer and distributor of soft drinks in the Netherlands. When the 1,750 fluorescent lamps in one of the major distribution halls had to be replaced, the company considered switching to LED lights.

LEDs last longer, contain no dangerous chemicals and use electronics to generate visible light only, meaning they are more efficient. In addition, and of great importance in a manufacturing environment, they do not make it seem as though some moving parts are stationary when in fact they are not.

And yet, there was some scepticism. “LEDs were more expensive to buy, we wondered whether they produced the right quality of light and we didn’t know whether they were rugged enough,” says Pier Snieder, Safety, Health and Environment Manager at Vrumona.

A test facility with two types of LEDs was set up in the hall. “One type couldn’t handle the vibrations, but people were enthusiastic about the other. Forklift drivers enjoyed the light, saying it allowed them to better read their instruments and the small print on crates.”

Strong financial considerations ultimately helped convince the Management Team. “Though LEDs are more expensive, they last longer and use 70 per cent less energy. In the first year alone, we reduced our energy consumption by an amazing 2.5 per cent. LEDs save money, they are safer and they allow us to fulfil our promise of being more sustainable.”

One doubt remains. LEDs shine less brightly over time, so the question was whether they would be able to fulfil their promise of a long lifespan. “We negotiated some tough guarantees from the supplier, but we’re still taking a risk. We are willing to do that, because we believe in the benefit of LEDs.”

This enthusiasm carries over into 2011. Vrumona will consider LEDs for its outdoor lighting and for its production hall. For the time being, the first success is fact. As Pier says, “Every time I enter the hall and look at the LEDs I think: we did it!”

Greater focus on renewable energy

For years, we have used biogas from our wastewater treatment plants to generate a small percentage of our energy. In 2010, we carried out a wide-ranging study into other, alternative forms of energy. We considered everything from wind and solar energy, to biomass, geothermal and hydropower. We did so because we believe that this is the future of our energy supply and because in order to reach our 2020 emissions targets, alternative energy will have to account for approximately 25 per cent of the improvements.

We have embarked on projects that can contribute to our Brewing a Better Future goals, such as:

Commitment to buy electricity from a wind energy farm in Mexico that will ultimately supply up to 85 per cent of the power needs of the Mexican operations

Large-scale biogas feasibility study in the Netherlands. We are investigating how biogas produced by a number of farmers near our Zoeterwoude brewery could be used by the brewery. In due course biogas could replace approximately 30 per cent of the natural gas used today

Solar Photovoltaic at Alken Maes brewery in Belgium. In 2010, we completed a feasibility study. It has been decided to install approximately 1.5 MWe Solar Photovoltaic panels. It is expected that these panels will produce 1.2 – 1.5 GWh per year

We carried out a feasibility study for Solar Thermal Heat application in five European locations. We have chosen three production units in Europe where solar heat will be used.

Uncovering the potential of solar thermal energy

Europe

Uncovering the potential of solar thermal energy

Five studies conducted by Heineken in 2010 have shown the potential for using solar heat in three of the Company’s production units (two breweries and one maltery). By retrofitting existing equipment and investing in new technology, Heineken could make additional significant steps to reduce its carbon footprint.

The study was conducted by Heineken in co-operation with AEE INTEC, an Austrian institute for sustainable technologies. They looked at the potential of solar heat, the process by which sunlight warms water via solar panels. The study covered five production units located in two different climate zones in Europe.

The results showed that three of the production units received sufficient, usable sunlight: the Göss brewery in Austria would be able to heat the mash tuns used during the brewing process, the Valencia brewery could use heat to pasteurise beer and the Lisbon malting facility could use heat to dry the malt.

Solar heat would require the installation of special solar panels and the retrofit of existing equipment and processes.

“In Göss, solar heat will account for an estimated 18 per cent of the mash tuns’ energy use. In Valencia, this is 24 per cent for two pasteurisers, while in Lisbon it is 18 per cent for the malt drying process,” says Herman van de Bergh, Manager Global Energy and Water Programme.

The next step is for Heineken to apply for joint funding of the expensive pilot projects with the European Commission for Energy. These pilots will test whether solar heat is feasible and economic in relation to the day-to-day operations of the three production units. A decision by the European Commission is expected in September 2011, and if successful, the project should be completed in April 2014.

Beyond that, Heineken has a vision of making large-scale use of solar heat where possible. “We could retrofit existing production units, but our ideal is to design process equipment to use solar heat from the outset. Southern Europe, Northern Africa and countries like Mexico have the perfect climate for solar heat,” says Herman.

An emerging ‘total water’ strategy

Heineken uses water for brewing, packaging and cleaning – often in water-scarce areas – so water availability and quality are crucial. In 2009, we signed up to the CEO Water Mandate, which lays down six principles of world-class water stewardship. In 2010, we accelerated our work in relation to all aspects of water. We became a member of the Water Footprint Network (WFN) and B.I.E.R. (Beverage Industry Environment Round Table). In addition, we also carried out two water footprint studies, see the case study 'Water footprint studies show the way forward'.

Water footprint studies show the way forward

Slovakia and Egypt

Water footprint studies show the way forward

In 2010, Heineken conducted two water footprint studies. The water footprint is an indicator of freshwater use that looks not only at water usage in breweries, but also takes into account the water use by all the products, processes and services that are required to produce beer.

The study compared the water footprint of beers produced in two contrasting areas: wet Slovakia and dry Egypt. The study was carried out by DHV consultancy in co-operation with Professor Arjen Y. Hoekstra of the University of Twente in the Netherlands and Scientific Director of the Water Footprint Network.

“It turns out that more than 90 per cent of the water footprint is related to the cultivation of crops. In Slovakia this is ‘green’ water, or rainwater, while in Egypt it is predominantly ‘blue’ water, or surface and ground water,” says Ron Bohlmeijer, a water specialist at Heineken’s Supply Chain team in the Netherlands.

The ‘grey’ water component is also highly relevant. Grey water is the volume of water required to dilute pollutants to such an extent that the quality of the water remains at or above agreed water quality standards.

Depending on the ingredients and the recipe, the total water footprint of beers produced in Egypt varies from 282 l/l to 418 l/l. The water footprint of beers produced in Slovakia ranges from 283 l/l to 290 l/l. These figures include the grey water component.

Ron says the findings raise interesting questions, such as how to involve suppliers in water reduction strategies and how to balance local sourcing with the impact of crops on local water sources. Finding the answers to these questions and implementing them is now the next challenge.

“The studies have taught us a lot and now we can begin to formulate a new water reduction strategy. We will be able to make informed decisions to mitigate the impact of our operations and improve our environmental sustainability,” says Ron. In 2011, Heineken will conduct additional water footprint studies, for example into growing barley and brewing beer in other types of market environment.

Using less water in production

In 2010, our specific water consumption decreased from 4.8 hl to 4.5 hl per hectolitre of beer, cider, soft drinks and water. Some of our breweries made notable progress: in Lagos (Nigeria) specific water consumption decreased significantly due to the use of recovered water for cleaning purposes, condensate recovery and the implementation of a loss identification system. The optimisation of the bottle washer in the packaging department of our production unit in Ama (Nigeria) resulted in additional water savings. Our production unit in Rechitsa (Belarus) significantly improved its specific water consumption due to a large increase in production volume, coupled with an additional improvement in efficiency as a result of the implementation of best practices.

About half of our water comes from our own groundwater wells, and municipal water accounts for one third of our water supply:

Ground water (own wells)

54% of total volume

Surface water (river/lake)

12% of total volume

Municipal water supply

34% of total volume

In 2010, 82 per cent of our breweries were compliant with the 7hl of water per hectolitre of beer standard as defined in the Aware of Water programme. This was a slight improvement on the 2009 figure of 80 per cent.

Seven sites successfully reduced their water consumption to less than 7hl/hl in the last year. However, four previously compliant sites namely Newcastle (UK), Opwijk (Belgium), le Lamentin (Martinique) and Mbandaka (DR Congo) increased their water usage to above the 7hl/hl limit. The Aware of Water programme has now been incorporated into the Brewing a Better Future programme.

Production units with water consumption higher than 7 hectolitres of water per hectolitres beer, cider, water and soft drink Number of production units

Wastewater performance improving

In 2000, Heineken had 20 production units in Africa and the Middle East and the commitment was to install wastewater treatment plants (WWTP) at each location. Since 2000 seven of the sites have either been divested or are no longer majority holdings. Due to acquisitions and newly built plants, Heineken currently has 31 production units in the region, of which 19 have wastewater treatment facilities or use municipal treatment. There are 12 sites with no treatment facilities. At three of these sites the WWTP is under construction: Democratic Republic of Congo (Bukavu, Boma and Kisangani). Nine treatment facilities are planned to be completed by 2014.

In 2010 the effluent organic load discharged to surface water was 17.4 ktonnes, a slight increase compared to 2009 when it was 17.3 ktonnes. This is mainly caused due to increased production in our sites as Karlovac (Croatia), Gisenyi (Rwanda), Aba (Nigeria) and Ijebu Ode (Nigeria). Since these sites do not have proper wastewater treatment facilities, the increase in production has a direct impact on the discharges to surface water. However, several sites were able to greatly decrease their organic load discharge. The brewery in Vialonga, Portugal, improved its performance with a newly updated wastewater treatment facility, while the brewery in Lagos, Nigeria, improved the efficiency of its wastewater treatment facility.

Wastewater treatment plants Africa & Middle East Region

Measuring water stress exposure

Heineken Supply Chain has measured the exposure of brewery sites to water stress in order to be able to respond to water-related risks. Using the Global Water Tool of the World Business Council for Sustainable Development (WBCSD), the brewery sites are ranked on water stress exposure. This tool uses several indicators that analyse water scarcity. These are the Total Renewable Water Resources per person (Food and Agriculture Organisation, FAO), the Annual Renewable Water Supply per person (World Resources Institute, WRI), the Water Stress Index (University of New Hampshire, UNH) and Environmental, Physical and Economic Water Scarcity (International Water Management Institute, IWMI). The water intensity of the breweries is calculated to track the water usage of breweries in water scarce areas. These results reflect our increased focus on this critical area and are a first step to identify breweries that should operate in a water neutral way.

Raising awareness of water risks

The results of a survey addressing the performance of Operating Companies on water-related risks in the beer supply chain demonstrate that the majority of Operating Companies systematically track and monitor water availability at local operations level. In the majority of our facilities, a local Source Water Protection Plan is in place. Operating Companies are also alert to potential changes in price structure and regulatory changes.

There is clearly room to improve the way we monitor and mitigate conflicts between users relating to water resources, although we are already actively collaborating with key stakeholders in the river basins in which we operate. We can also improve the awareness of water-related risks of our suppliers as well as the level and type of collaboration with suppliers to help address this. In the coming year we will improve in these areas.

Performance indicator6

Operating Companiesactively engaged

Tracking and monitoring water quantity and quality

64%

Managing risks related to changes in regulations and pricing structure